One of the world's largest restaurant companies, Yum! Brands runs the KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill chains, serving fried chicken, tacos, and pizza at tens of thousands of mostly franchised restaurants in dozens of countries. It began in 1997 when PepsiCo spun off its restaurant division as Tricon Global Restaurants; the "Yum!" name came from its stock ticker symbol in 2002. The Colonel behind KFC perfected his secret 11-herbs-and-spices fried chicken in the 1940s at a Kentucky gas station.
Yum! Brands agreed to sell Pizza Hut for $2.3 billion in net proceeds, triggering a $359 million deferred tax benefit that pushed Q2 GAAP EPS to $3.08.
Yum! Brands agreed to sell its Pizza Hut business. rose 12.2% to $2.17 billion and reached $3.08, driven almost entirely by a $359 million from the pending divestiture, while Taco Bell's rose 19% on 7% growth. The company is reshaping its portfolio around Taco Bell and KFC, with the Pizza Hut sale expected to close in August 2026.
Key takeaways
was $3.08, up from $1.33 a year earlier, as the company recognized a $359 million after entering agreements to sell its Pizza Hut business in two transactions expected to yield approximately $2.3 billion in net proceeds.
Taco Bell Division rose 7% and increased 19%, driven by the sales growth and higher company restaurant margins, though G&A costs rose from higher headcount and technology spending.
KFC Division rose 9% excluding foreign currency, supported by 2% franchise growth and 7% unit expansion.
Section summaries
Management's Discussion and Analysis
Yum! Brands Q2 2026 worldwide system sales grew 5% ex-FX, with Taco Bell up 9% and KFC up 6%, while Pizza Hut declined 2%.
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Worldwide grew 3% in Q2, driven by Taco Bell (+7%) and KFC (+2%), partially offset by a 1% decline at Pizza Hut.
Pizza Hut Division fell 14% excluding foreign currency, as higher advertising costs for the Hut Forward program and a 1% decline compressed results.
rose 12.2% to $2,169 million, while narrowed 3.3 points to 67.7%, continuing a multi-quarter decline as company restaurant exposure increased.
rose 13.7% to $507 million and rose 8.5% to $407 million, while fell 9.2% to $9.5 billion.
What changed
The Pizza Hut strategic review flagged in FY 2025 and Q1 2026 has now resulted in a definitive agreement to sell the business, with two transactions expected to close in August 2026 and generate approximately $2.3 billion in net proceeds.
Pizza Hut Division fell 14% ex-FX in Q2, compounding the 16% ex-FX decline in Q1 2026 and the 9% full-year 2025 decline, as the Hut Forward program's higher advertising costs have yet to produce growth.
Taco Bell growth decelerated to 7% from 8% in Q1 2026, but growth accelerated to 19% from 16% as company restaurant margins improved.
Consolidated narrowed to 67.7% from 71.0% a year earlier, continuing the decline flagged in Q1 2026 after the Q4 2025 acquisition of 128 Taco Bell company-owned restaurants increased company-operated exposure.
What to watch
Closing of the two Pizza Hut divestitures in August 2026 and the final net proceeds against the $2.3 billion estimate, as well as the use of proceeds — whether for debt reduction, share repurchases, or reinvestment in Taco Bell and KFC.
Taco Bell against the 7% Q2 figure as the brand laps a 4% increase in Q2 2025, to see whether the growth rate holds as G&A spending on headcount and technology rises.
Consolidated trajectory after falling to 67.7% in Q2, to determine whether the Pizza Hut sale and any change in company-operated restaurant mix stabilizes the rate.
KFC Division unit growth after the 7% Q2 expansion, to see whether the pace sustains or moderates after the 537-restaurant Turkey termination in early 2025.
Taco Bell Division rose 19% on strong and higher company restaurant margins, though G&A increased from higher headcount and tech spending.
KFC Division increased 9% ex-FX, supported by unit growth (+7%) and franchise of 2%.
Pizza Hut Division fell 14% ex-FX due to higher advertising costs for the Hut Forward program and declines.
surged to $3.08 from $1.33, primarily due to a $359 million recognized upon entering agreements to sell Pizza Hut.
The company expects to receive approximately $2.3 billion in net proceeds from the two Pizza Hut divestitures, which are anticipated to close in August 2026.